Since the recent chances in the electric power industry towards deregulation, the task of the power system operators has become more critical and challenging. The systems are being operated with smaller security margins while the building of new infrastructure is facing an increasing number of economic and environmental obstacles. For these reasons, there is a need for a tool that assists the operator in accurately assessing risk of several types of insecurities. In this dissertation, a methodology is presented to measure the risk of the transient instability. This risk index combines both the probability and impact of transient instability. The probability is found by modeling probabilistically the fault location, fault occurrence, fault type, and fault clearing time. The impact of the transient instability is evaluated by accounting for the repair costs, the energy replacement costs, and the load shedding costs. Fast computational procedures were explored to enable on-line calculation;The operators are not only in charge of the security; they also have to make sure that the transfer capabilities are maximally utilized. This is why the operators are looking for an optimal balance between economics and security. In this work, a multi-criteria decision making support tool is presented to assist the operator to decide among several operating options, according to two conflicting criteria: maximizing profits and maximizing security, where the security is quantified by the risk.